Buying Property Brisbane
“Buying Property 101 – How to Avoid Missing Out in a Multi-Offer Situation”
Have you ever gone to buy a house and the agent told you there were other people putting offers in also?
The moment I disclose this situation to a potential buyer is the moment I notice their expression seemingly change from excitement to concern.
No one wants to miss out on a property they have their heart set on, especially when they’re prepared to pay good money to secure the deal.
In a fast moving market, one that is in favour of the seller because there is an abundance of buyers willing and able to make offers to purchase at the drop of a hat, multi-offer situations become the norm and the standard type negotiations that buyers and sellers are used to fly out the door along with the buyers’ negotiation power.
These types of markets often flush out the cash buyers, which is fantastic for sellers but dynamite to your average buyer who is somewhat limited by bank finance and a tight budget. Even the buyer who is prepared to pay over and above the asking price can sometimes be trumped by a cash buyer who can offer the seller the one thing that other buyers cannot – an instant done deal with no special conditions.
Negotiation skills play a key role in these types of situations, and the weakest link will be the party who can’t negotiate to save themselves, or worse, appoints an inexperienced agent to represent them.
So how does your average buyer navigate their way through this unique market situation?
In times where buyers are scarce and sellers are begging for any kind of offer, the cards are held firmly in the buyer’s hands, but in a rising market, the tables are turned and the power ultimately shifts to the seller.
In my experience as an independent real estate agent in Brisbane, buyers should be seeking professional advice on how to navigate these kinds of situations. From my firsthand knowledge as a real estate agent, I can see that buyers are at a huge risk of playing their hand wrong, losing the property and becoming incredibly disillusioned with the agent and/or the situation. The overall result can lead to a poor property buying experience that leaves them bitter and not wanting to invest in another property ever again. It’s not their fault, it’s just that the average buyer has probably never experienced this type of market condition before and is unsure about how to best manage the buying process given the new variables.
So how does one overcome this?
Even though real estate agents like myself are obliged to work in the best interests of our client, who is the seller, we still have an ethical duty of care to the buyer and ultimately it is the job of the real estate sales agent to do what it takes to bring the deal together, meaning they simply can’t just neglect the buyer but must help all parties come to a mutually satisfying arrangement. An arrangement that doesn’t leave the parties bitter and twisted or even worse, burned, which can easily happen if a multi-offer situation is handled poorly by a selling agent.
Most experienced agents have specific processes for dealing with multiple offer situations and here’s how I help my buyers work through the scenario when I know that numerous buyers will be trying to secure the one property.
- You will be given an “Expression of Interest” form if you have an interest in the property.
- You will be given an explanation of how I handle the Multi Offer process at the beginning and the expected time frame that offers will be presented to the Sellers.
- I would strongly recommend that you convey your interest by email and text if you have reached a decision once you have left the property without an “Expression of Interest” form and ask to be kept in the loop. Don’t wait to be called. Being busy with proactive buyers means the Agent may not have the opportunity of getting back to you.
- You will be advised that you will be given a second opportunity to revise your offer prior to the owner making their final decision. I always ensure that each buyer who submits a written “Expression of Interest” under these circumstances is advised about ‘my process’ –that they WILL be given one more chance to revise their original offer before that all important final decision. Why do I do this? Because with the excitement of finding THE property, a lot of people go through various emotions and so their response to a property can change in a matter of hours. That bit of extra time can help them reach a more comfortable decision for themselves. Sometimes that is driven just by emotion. Sometimes emotion mixed with logic. Sometimes just plain logic. Whatever your approach, I find that bit of breathing space helps the situation for all parties.
- While this is logical, I advise each Buyer that there can only be one successful Buyer so the Multi Offer situation is there to provide you with that opportunity. No one likes to miss out but the process is an essential part of getting to a resolution.
- You will be advised about the likely time frame of each step.
With this process in mind, there are three things that every buyer should be asking a real estate agent when they go to put an offer on a property in a moving market.
- Are there other buyers who are looking to make an offer on this property?
- What is your process in a multi-offer situation and what can we as buyers do to put ourselves in the best possible position to secure the property?
- When will you be presenting the offers to the seller and when do you expect a decision to be made? Buyers, you’re looking to establish a timeframe here.
Mr and Mrs Buyer, you should always remember a good agent will have a PROCESS when it comes to multi-offers. If they don’t, then you need to tread carefully and seek expert advice, possibly from an independent Buyer’s Agent or a professional in the real estate industry whom you can trust.
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